March 2010

Because gold is getting knocked down in night trading, I've offered some bullish benchmarks to guide you. There's also a nuanced technical prospectus for the Gold Bugs Index (HUI), which looks pretty feisty.

The rally is closing on a Hidden Pivot target at 437.33 that seems likely to show some stopping power. If it doesn't, bulls should take encouragement -- the moreso if the rally goes on to take out two peaks at, respectively, 443.13  and 453.12.  If the space between those numbers should be traversed without a pullback on the hourly chart, expect a test shortly thereafter of January 11's key high at 475.32.

The futures were drifting lower without much conviction Wednesday night, presumably bound for a minor Hidden Pivot at 1112.75. This number is unappealing for bottom-fishing, however, since it coincides with visually obvious support carved out earlier this week in overnight trading.  The odds would be better leveraging camouflage near 1110.75, the Hidden Pivot midpoint associated with the 1137.25 rally target given here yesterday.

Yesterday's thrust petered out after poking an inch above the 1144.50 benchmark we'd been using as a minimum upside target.  The action was bullish on balance, but there is still work to be done if buyers are going to take charge. As noted here yesterday, a close above 1144.50 is needed, at least, but just as persuasive would be a push today that surpasses   a key high at 1148.00 that was recorded on January 14.  The nearest minor Hidden Pivot resistance lies at 1156.90, so let's make that our minimum upside objective if and when gold moves decisively above 1144.50.

With the Mother of All Bear Rallies about to enter its second year and the banking business going like gangbusters, one could lose sight of the fact that quite a few American cities, counties and states are facing the most dire economic circumstances since the Great Depression.  San Francisco became the latest casualty of hard times when it put more than 15,000 of its 26,000 workers on notice that they will be laid off at the end of this week. Most supposedly will have the option of being rehired to work shortened hours, but they will not be returning to the same jobs. For one, employees with many years on the job will lose their seniority and many supervisory positions will be eliminated. And for two, the city will no longer be bound by certain past agreements with the unions.  By cutting workers back to 37.5 hours and reducing their paychecks by 6.25 percent, Mayor Gavin Newsom hopes to save $100 million. However, the total budget shortfall for the 2010-11 fiscal year is $522 million, so the city will need to come up with additional, presumably drastic, ways to close the $422 million gap that will remain. Mind you, this is not some depressed town with a down-and-out manufacturing base and no economic options. In fact, the tourist economy has remained relatively robust, and redevelopment has turned the once-dingy South of Market area and warehouse district into thriving incubators for new businesses. But like so many other large cities, San Francisco has been expanding its payroll at several times the rate of the private sector in recent years, resulting, for one, in more supervisors making six-figure salaries than any of the rank-and-file workers and taxpayers can comprehend, much less pay for. A Bloodbath Newsom calls his plan a “pro-job alternative,”

As the oil price was rising through the $81.00 level mentioned in yesterday's tout, it was also breaking through the midpoint of an hourly pattern that had developed overnight.  But this came after a 25-cent bounce off of that exact midpoint, which gives us high confidence in the pattern.  Unlike the D target described yesterday, which hovers just below the 17-month high, this one, at 82.13, is truly hidden "in the middle of nowhere."  (Note: Yesterday we understated the 17-month figure by two months.)

Gold peaked overnight a dime from the 1144.50 target flagged here earlier.  This is bullish action, of course, but as I noted in the original tout, the April contract will need to close above that Hidden Pivot resistance before it embarks on a new leg up.  Once under way, the rally from that launching pad should be assumed bound for 1244.50 exactly.

Three of today's touts are actionable, so take your pick. As of around 2 a.m. EST, DaBoyz seemed to be waiting for an opportunity to spring a trap, but there was little movement in the index futures.

The futures somewhat exceeded a Hidden Pivot resistance at 16.985 yesterday, creating a robustly bullish impulse leg on the intraday charts in the process. This portends more upside over the near term to at least 17.115, but a close above that Hidden Pivot would augur 17.470. The midpoint associated with that last number is 16.900, making it a logical place to try bottom-fishing on a pullback. _______ UPDATE: The rally made it to 17.370 before sellers shaved 30 cents off the high.  We missed catching the ride north because the overnight low never got any lower than 16.950. The 17.470 target remains valid.